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tv   Bulls and Bears  FOX News  November 26, 2011 10:00am-10:30am EST

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>> events.com-- >> we'll put it up. the and the after the show, show. >> and tomorrow, we'll see you then. >> brenda: just when shoppers hit the stores for the holidays, a triple whammy hitting the economy and stocks. first, signs consumers weren't in a buying mood before the all important shopping season kicks off. he canned second, worries, another downgrade for the u.s. is coming, after the super committee failure. then, stress over the bank as the fed gives the largest ones a stress test to see if they can survive another major shock. will this triple threat be the grinch that steals any chance for recovery. i'm brenda buttner, bulls and bears, let's get to it. gary b smith. tobin smith.
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jonas max ferris, and the economic policy institute's kristin dorsey. welcome gary k will the triple whammy whack the economy back into recession. >> i'm going to be the the scrooge here, i think so. there's just a lot of things happening all at once that tell me, there's a problem ahead. number one, we're looking at european interest rates to skyrocket and there's no absolutely no confidence there, the numbers out of asia now, particularly china have been headed south and then you add to our 15 trillion of debt, which is, i believe, crowned at the private sec torques i think we've got trouble ahead. just look at the stock market, it's speaking volumes what's going on. >> brenda: volumes, such as? >> you've got commodity stocks getting hit real hard. financials in the toilet right here and i think that measures to the economy. >> brenda: gary k, you've got the one hand and gary b, the other? >> well, and gary k makes a compelling argument for doom
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and gloom. in fact, the same argument that i think 99% of the people out there are making and that's why i think it's a good time to be on the other side and kind of like the discussion we had about inflation, a few months ago and inflation, inflation, inflation, and yet, there was no sign of it and that's one of the positive signs. there's still no sign of inflation, and consumer spending is down, but it's not down substantially, and retail sales for october were up and the economy is expected not to shrink, but to grow by about 3%. so, look, i don't think everything's rosie out there and we're going to have another late '90's rally, but i don't think as bad as gary k says and being that stocks, i mean, some stocks out there are already down 30, 40, 60%, and i'd rather be on the long side of the market, than the short side. >> and the forbes gang is coming up, has a totally different view from you, on inflation, and so stay tuned for that. so, toby, you are quite
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concerned that gary b is wrong, in fact, you might even be using the d word? >> there are many parts of our economy that nr fact in a depression not just home builders and construction. the things related to those industry for 30 and 40 million people in the united states it's not a question of recession. the question is are they ever going to get out of that depression. that starts to eat into the economy. and very soft whether it's positive growth or negative growth is not going to matter. what's going to matter. the catalyst it get us off the mat is just not there yet. if anybody is investing their money with the idea that the u.s. economy is going to be ripping at 3% by the way, i think is, that number is the know close, they're making a lot of bet. >> brenda: jonas you don't buy into that. >> the depression, i don't think-- if you're really in a depression. >> real estate markets. >> if you look at depression stories and compare it today. home depot is too crowded to
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say there is he' a depression in housing today. it's in trouble, okay, it's slow. >> and how many people you know building houses. >> brenda: give him a chance, go ahead, jonas. >> i would say i do not think we're going to have another recession, these are fear-based items whether it's the european debt problems or-- these are all, you can psych yourself into a depression, but we don't have a class business sector like you had in the last major recession, like housing the last one. there's nothing there, it's a sluggish economy and it's not a dwegs. knots going to cause a recession, it's only going to happen if we start panicking and stop behaving like normal people and buying stuff and scared of the next one out there. >> brenda: isn't that what it's all about, christian, it's all about consumer confidence. >> confidence is a huge part of this.
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despite the headwinds, europe and asia and other markets to lead us out of our tepid recovery into robust one, there's still a lot of advantages that we have in the united states right now. and in the principal advantages for us not to really do anything, that further accelerates us into a lack of confidence. you know, congress has to do things like make sure we continue the payroll tax cuts, make sure that we continue to provide assistance to the unemployed. as long as they don't do things to make things worse, i agree with jonas, a matter of people not believing we're headed into recession and accelerating our defense into negative growth. >> brenda: gary k, take a look at that. because it's-- it really is what people feel that has a lot to do with what we've had it. >> well, it's all about contestants. you have he' said it, brenda and every day we wake up and we read about the debt that's outstanding and we read about 9% unemployment and to think that this is all fear-based. we're talking reality here and
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for me, the unemployment looks to be 12 to 15% and i don't think you can get away with that and when you see grosse pointe woods numbers at 2%, you might as well as be flat because in the numbers, a lot of statistics like inventory that doesn't matter to me that much. i just think, we're already on the cusp of it and just think we're getting close here with what's happening in europe and nothing getting done here. >> hold on. >> the inventory-- let me just skip to gary b. gary b? >> gary k makes the argument, well, it feels like it is, you know, kind of feels bad. look, i agree, it feels terrible out there. but especially-- >> and if you don't have a job. that's number one, whether it's you feel, going back to, it felt like, you know, inflation is going to skyrocket, skyrocket and it didn't. as far as consumer confidence, that's always been a good contrary indicator. and conservative is highest when the economy is about to go in the ditch and it's the lowest when the economy is
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about to spring up. and finally, the third point, i think, our viewers and certainly those of us around the table are looking at the whole european debt crisis and the greek crisis, but 99% of america is not. too inside baseball. the only metric they care with unemployment, which, while high has remained flat the last few months. >> brenda: toby? >> wow. >> look it, there are sectors within the united states that are doing great. look it, if you do a java code or computer program, you're the person demanding a higher wage. but, broadly, what we're going to see is this, this slow growth because there is no engine, gary, other than health care, costs, and ute sayings growing up to offset the cuts in job, cuts around the world. 17,000 people from a company this last week. >> energy.
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>> energy would be great and we need an administration behind energy, and if we had that a different story. >> brenda: christian, the last word, 20 seconds. >> oh, thank you. you know, the question was with about whether or not we're head toed are recession, which is going to be indicated by negative growth and i don't think we are going to get there because too many positives i see in the economy in the macroeconomic outlook. you may not think that inventories matter, but they do a lot. inventories are depleted which mean producers are going to have to produce based on the way people are spending, which is going to drive economic growth upward. >> it's demand. >> there is stabilized demand, demand is not cratering, so that's a positive sign. >> okay. that's got to be the last word, thanks, guys. holiday drivers getting punched at the pump. what opec is doing right now that has someone on the cavuto gang saying holy, it's going to get worse. and first a local government
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cannot go bankrupt. oh, did it just slam taxpayers? get ready for even more government bailouts. 2, of cou, they were sent away. after the war, as a japanese coming back from camp, he started a little store on main street in seattle. of course they needed some money, and bank of america was the only bank who would talk to my father. and we've stayed with bank of america. we have four stores now, three in the pacific northwest and one in oregon. my parents would not believe how popular it is now.
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guaranteed, or we'll buy it back. >> we're live from america's news headquarters, i'm jamie colby. officials in pakistan shutting down a following reports of a cross border n.a.t.o. air strike that killed reportedly dozens of pakistani troops. the u.s. ambassador to pakistan says the u.s. is investigating the incident and according to a top official, 40 tankers and trucks have already been stopped and returned from a check post. more on that on fox. also, nasa launching the world's big s robotic explorer. take a look. these are live pictures, nasa tv, the mars rover nicknamed curiosity, blasting off from cape canaveral. atlas five putting them on a
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trek to the red planet and curiosity will look for evidence that mars may once have been or suitable for life. we have more 30 minutes away. >> brenda: options for bankruptcy over bailout. harrisburg, pennsylvania was trying to do just that, but a judge just blocking the cash strapped city from doing it. and gary b, you say this, no to bankruptcy says yes to more taxpayer funded bailouts? >> exactly, brenda, look, we saw this happen in the hue and cry about the financial industry was essentially companies that were not allowed to go bankrupt that the taxpayer had to pick up the bill for, we saw it with general motors for crying out loud. for cities it can work, out in vallejo, california, bankruptcy in 2008. guess what now about to be coming out of bankruptcy and the lean eest budget.
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and the programs are cut down to the bone and the city is thriving and doing well. it can work for harrisburg, but the government won't let it. it's silly. >> brenda: tobin? >> no question, this is the act of a guy coming in basically, you know what, i think there's a bigger pocket we can go after, the federal taxpayers, let's not take the medicine, let's not let the system work, but let's go to the taxpayers, because the taxpayers can pay it, why not? >> jonas is this the free market, bankruptcy? >> the government protected you from creditors and in the free market, the creditor will come after you all day for the rest of your life and grab your stuff and auction it off. and the concept is that so they can't do that. and pay you back and this is a move to basically not protect the the city from creditors and that could be good. now, look could it lead to
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bailouts from the federal government. you're not a person and change the bankruptcy law for people and it's harder to go bankrupt now. it should be harder for cities and towns. they can raise revenues and raise taxes and don't have to throw up their hands and maybe we can't pay for this, a few years ago. >> gary k. what do you think about this? >> i think tobin and gary b, so right. all roads are going to lead to the taxpayer and the state arbitrarily changed their own laws and harrisburg couldn't file for bankruptcy and they're going to pick and choose, it's about the winners and losers, once again, and that's happening from federal all the way down to, and next you're going 0 see a big one in detroit, i think come next year, that's going to be a fun one to watch, too, taxpayers on the hook, whether it's on the service side or paying more taxes. >>, but under this plan, they're going to get for every dollar that they're owed, christian, under a bankruptcy plan. >> yeah, you know, this is certainly not the solution for
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harrisburg, you know, harrisburg issue is that they have a huge amount of debt, three times more than they bring in in property taxes, it's not like other communities, they simply have a problem balancing their budgets and they have deep, deep issues and the reason they're not allowed to proceed with the bankruptcy because the mayor disagrees with the city council and if the politicians are not on board no way you can manage a bankruptcy effectively and harrisburg has rejected the idea of going into state, state covered receivership, which is really what it ought to do. and as i believe, jonas mentioned there are plenty of options, they have yet to pursue, such as selling or releasing assets and bankruptcy is not the anchor. frankly, taxpayers are going to pay with that in the form of higher municipal bond rates forever. >> and two taxpayers, and would the taxpayers, why should people in oklahoma, wind up picking up the tab for these guys in harrisburg, i
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mean, this is a local-- >> they're not they're going to pick up the tab in pennsylvania. >> well, fine, i live in one part of pennsylvania and now i can pay for my brother in harrisburg because he made a dopey decision? and the local and the way to do that is bankruptcy. >> do you see, gary b there might be a difference between vallejo and harrisburg? yfrjts he, there's a difference in why the foundation is absolutely, as christian pointed out and it doesn't matter why they can't pay the bills. the bottom line is they can't pay their bills and the whole question is what taxpayer are you going to put it on. put the burden on. are you going to put the burden on the harrisburg taxpayer as jonas points out or put it on the taxpayers as a whole collectively like with general motors? i don't think it's fair to put it on the collective. >> brenda: last word. >> don't forget, you can stop paying bills without going bankrupt.
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bankruptcy is so you give less to creditors and leave them alone. they can stop paying and no one can lend them money and sell the capitol building, i don't think what they're going to do. >> who would buy it no. >> and does it have any gold in the dome? that's what i'm-- >> all right, thanks, guys, that's got to be the last word. >> cutting hours, not jobs. the work sharing program is spreading and why someone here says it's more proof that it's the free market, not ge that has the answer for loge unemployment. in america, we believe in a future that is better than today. since 1894, ameriprise financial has been working hard for their clients' futures. never taking a bailout. helping generations achieve dreams. buy homes. put their kids through college. retire how they want to. ameriprise. the strength of america's
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>> coming up up. it's happening, but is the best way to bring down unemployment? plus, occupiers calling for a retail boycot
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>> instead of laying off more companies cutting company's hours and tobin, you say this is the best free market solution to high unemployment? >> it is, and you can go to germany which developed this and it wasn't the german government. it was the german companies. small to mid sized company in manufacturing. and they know that there's two types of capital. financial capital and human capital. if you lower the investment in human capital by extended layoffs they-- that human capital and they have the best economy in europe for it. >> jonas, isn't this under employment. people who want to work full-time, but forced to work part-time because there aren't enough jobs. >> this is human capital taking it on the chin because of capital. in a recession, you cut jobs
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because you have less demand for your product. and this is, it's created, an interesting concept which is basically saying we'll keep everybody on board, but they'll all work less hours. that's what it is. the government is going to subsidize it. >> the economy is it in recession, why will not? >> by the same logic, only work and employ 30 hours during the recession, if they passed that law, and we'd have 2% unemployment. and it's the same concept mismanagement of your labor force, is it better than extending unemployment for multiple years like he we did, not as good as companies deciding who is the good employee and who is the bad employee. >> gary b. what do you think? >> well, the government deciding that everyone should only work 30 hours and a company deciding are not the same thing. one company might decide to do it, another company might not decide to do it and maybe they said, look, we don't want everyone all kind of just a
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little bit it frowning, we want to get rid of some people, and nip it in the bud right now and keep everyone that's happy working here. and really, the pre-market-- >> the free market solution is to let each company decide without the government interfere and might turn out like jonas said, everyone points out as toby called the german solution and might not. that's the beauty of-- >> if you run a company that's not how you run your labor force. >> in germany you labor unions not let you fire people or the government is giving companies money to do this. no way a company would do this on their own. we're not going to layoff anybody. >> and jonas. >> why does it have to now, why would it happen now. >> brenda: let me get to christian, what do you think of this. >> the german short work program is not fully a market-based solution. it's government subsidized and that's the reason it works and it only works to avert mass layoffs due to sales being down. it doesn't do anything to deal
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with our particular acute situation, having more unemployed people than jobs available. so work sharing is a part of the solution, but no mean changes the game in it. by no means any market-based idea. it only works in germany and california and rhode island where it tries, because government actually uses some unemployment dollars to subsidize the missed hours. >> hold on, let me get gary k in in a limited time. gary k. >> last i looked, companies should do whatever they want to do to make the companies better and part of this job sharing is, work sharing is about morale. when you're firing too many people morale, that's number one. when you keep people on board and things turn around, you don't have to rehire again and that's a big cost. and i don't like government paid into companies. >> we've he got to go, thanks, guys, and thank you very much, christian, for joining us. >> occupiers, urging americans
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not to occupy big stores this holiday weekend and fighting back against the boycott with a buy-cott. so i used my citi thank you card to pick up some accessories. a new belt. some nylons. and what girl wouldn't need new shoes? we talked about getting a diamond. but with all the thank you points i've been earning... ♪ ...i flew us to the rock i really had in mind. ♪ [ male announcer ] the citi thank you card. earn points you can use for travel on any airline, with no blackout dates.
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>> predictions. >> lets forget the boycott, let's look at the buy-cott. macy's. >> brenda: gary b. >> a rough week. >> brenda: what is your prediction. >> i'm bullish on the market. like the first segment. dow 12 k by the end of the year. >> brenda: so you like the diamonds. >> toy. >> brenda: and gary k, bull or bear. >> the indianapolis colts have a better chance of winning the super bowl than dow 12,000. >> brenda: what do you like, gary k? >> defensive recession resense, good growth and-- >> jonas bull other bear. >> the days of recession proof is over, and the government-- but i'm going to pick wal-mart beuse we just saw a pepper spraying incident where there's alw
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